Why the preferred creditor status of Africa’s multilateral development banks is being questioned

There have been demands1 from international lenders for Africa’s multilateral development banks (MDBs)2 to be stripped off their preferred creditor status (PCS). It became a source of tension in debt restructurings that took place in Zambia and Ghana where loans from MDBs were excluded from debt restructuring. China3 and other creditors whose loans were haircut were calling for equal treatment of all creditors by including their loans in debt restructuring. One of the key economic policy organs of the African Union – the Specialised Technical Committee of Ministers of Finance, Monetary Affairs, Economic Planning and Integration – adopted a declaration4 calling for governments to continue strengthening relations with African Multilateral Institutions including respecting their PCS in line with their Treaties.